NEW YORK ( TheStreet) -- Regions Financial ( RF) on Tuesday reported a sharp decline in its credit expenses, along with an improved funding mix and solid commercial loan growth.

The Birmingham, Ala., lender's shares rose over 4% to close at $6.65.

The company followed the trend for large regional bank holding companies beating analysts' consensus second-quarter estimates, as credit costs continued to decline. According to KBW analyst Melissa Roberts, a sample of 64 large banks that had already reported second-quarter earnings showed that "on an operating-per-share basis, 46 banks (72%) beat consensus estimates, 4 (6%) met estimates, and 14 (22%) missed estimates. This compares to 2Q11 and 1Q12 when 67% and 69% of the banks beat estimates, respectively."

Regions reported second-quarter net income available to common shareholders of $284 million, or 20 cents a share, beating the consensus estimate of a 16-cent profit, among analysts polled by Thomson Reuters.

Earnings grew from $145 million, or 11 cents a share during the first quarter, and $55 million, or four cents a share, during the second quarter of 2011.

The second-quarter earnings were reduced by $71 million, or five cents a share, from the accelerated discount accretion related to the company's redemption in April of $3.5 billion in preferred shares held by the government, for bailout assistance received in October 2008, through the Troubled Assets Relief Program, or TARP.

The second-quarter results were boosted by a decline in the provision for loan losses to $26 million, from $117 million the previous quarter, and $398 million a year earlier, as asset quality continued to improve. Regions Financial's annualized ratio of net charge-offs to average loans was 1.39% during the second quarter, improving from 1.73% in the first quarter, and 2.71% during the second quarter of 2011.

Even after releasing $239 million in loan loss reserves during the second quarter, loan loss reserves covered 3.01% of net loans as of June 30, indicating that the company will continue to release reserves over coming quarters, boosting earnings.

Regions had $122.3 billion in total assets as of June 30, declining 5% from the previous quarter, and 7% from a year earlier. Nonperforming assets totaled $2.3 billion as of June 30 and made up 1.91% of total assets, improving from 2.06% in March and 2.75% in June 2011.

During the second quarter, the bank's net interest margin - the spread between the average yield on loans and investments and the average cost for deposits and borrowings - expanded to a tax-adjusted 3.16%, from 3.09% in the first quarter, and 3.07% in the second quarter of 2011, with the sequential improvement reflecting "lower deposit costs, lower non-accrual levels and further deployment of excess cash." The company said that during the second quarter, "average low-cost deposits improved 2 percent linked quarter while higher cost time deposits declined 10 percent."